We can work out the growth rates for 1, 2 and 5 years at 7.1% per annum compounded quarterly.
The quarterly rate is 7.1/4=1.775%.
Growth rates:
1 yr: 1.01775⁴=1.0729 approx
2 yr: 1.01775⁸=1.1511 approx
5 yr: 1.01775²⁰=1.4217 approx
We can apply the growth rates to any of the amounts.
To pay off $4075 in 2 years’ time would have needed an investment of 4075/1.1511=$3539.96 now. In a year’s time this would grow to 3539.96(1.0729)=$3798.07.
To pay off $6725 in 5 years’ time would have needed an investment of 6725/1.4217=$4730.10 now. In a year’s time this would grow to 4730.10(1.0729)=$5074.98.
Therefore the total amount to be paid in a year’s time is 3798.07+5074.98=$8873.05.
This calculation takes into account the fact that the debts are paid early so the amounts to be paid are correspondingly reduced from $10800.
The graph illustrates the calculation.